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Facts
The assessee, engaged in trading iron and steel products, appealed against the CIT(A)'s confirmation of additions totaling Rs.193.80 Lacs. These additions were made by the AO as unexplained cash credits under Section 68 for cash deposits during demonetization, comprising a Rs.58.75 Lacs cash gift from Shri Mukesh Kumar (unsubstantiated) and Rs.135.05 Lacs from sundry debtor recoveries (confirmations not filed).
Held
The Tribunal noted that the CIT(A) upheld the assessment without considering the assessee's replies and various documentary evidences submitted. Consequently, the ITAT set aside the CIT(A)'s order and remanded the matter back for de novo adjudication, directing the assessee to plead and prove its case before the CIT(A).
Key Issues
Whether the CIT(A) erred in confirming additions of cash deposits as unexplained cash credits under Section 68 without duly considering the assessee's replies and evidence, necessitating a de novo adjudication.
Sections Cited
143(3), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 24-06-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 28-12-2019. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.193.80 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The assessee is stated to be engaged in trading of iron and steel products.
During assessment proceedings, it transpired that the assessee deposited cash during demonetization period in its bank accounts. The amount of Rs.58.75 Lacs was stated to be received as cash gift from one Shri Mukesh Kumar. The assessee failed to substantiate the same and also failed to prove his relation with that person. After demonetization, the assessee gifted certain amount through cheques to the same person, The Ld. AO added the gifts so received by the assessee as unexplained cash credit u/s 68. The assessee was shown to have recovered sundry debtors for Rs.135.05 Lacs but the assessee failed to file confirmation of these debtors. Accordingly, the amount of Rs.135.05 Lacs was likewise added u/s 68. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us.
Upon perusal of assessee’s paper-book as placed on record, it appears that the assessee has furnished various replies on the impugned issues. The assessee also placed on record assessment order of Shri Mukesh Kumar. The assessee also furnished ledger extracts, summary of cash in hand, copy of statement of the assessee in the books of Shri Mukesh Kumar, relevant extract of cash book of M/s Raghav Alloys (prop. concern of Shri Mukesh Kumar) and various other documents substantiating the impugned deposits which are stated to be sourced out of cash gifts as well as sundry debtors’ realization. However, no concrete finding has been rendered by Ld.
CIT(A) on any of the issue and the Ld. CIT(A) has merely upheld the assessment without considering the replies of the assessee. On these facts, we deem it fit to set aside the impugned order and restore the appeal back to the file of Ld. CIT(A) for de novo adjudication after considering the replies of the assessee with a direction to the assessee to plead and prove its case. 4. The appeal stand allowed for statistical purposes. Order pronounced on 21-04-2025.